We needed to state more clearly the benefits of going through Chapter 11. The biggest savings was a dramatic reduction in our rents across the board.
Doesn’t Friendly’s share some blame for this situation? The company sold its real estate several years ago for a lot of cash. And then the restaurants leased back the locations - so Friendly’s should have known what it was getting into.
The company is responsible to some extent. But real estate values starting in 2008 have crashed nationwide so if restaurants are able to renegotiate leases they become more competitive. Many of the landlords renegotiated. But we also had to close a few stores.
Was it disappointing that no one else bid for Friendly’s besides Sun Capital, which bought the company in 2007? Did you expect others would have interest?
We had a lot of people who signed confidentiality agreements. It just so happened at the end of it all, Sun Capital was successful in bidding.
The auction was canceled because Sun Capital made the only offer.
I think for some others that were looking at [Friendly’s], it was not a convenient time for them.
The federal government accused Friendly’s and your owner, Sun Capital, of filing for bankruptcy to dump retirement obligations for thousands of Friendly’s employees and retirees. Will they get their full pensions?
The money is secure. The retirees are accessing their pensions. I don’t see any risk there. I’m not one of the pension holders, but as far as I can tell, nothing negative is going on.
Was business hurt by the bankruptcy?
We had the highest ice cream production ever in 76 years during October, November, and December. And it looks like January will be a record as well. The loyalty was clearly demonstrated. When we were having difficult times, the consumer has embraced us and wanted to help us out.
